Austin’s Strategy to Bring Back Middle-Skill Jobs

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At City Summit 2018, 50 cities committed to new initiatives to support their innovation economies. NLC’s City Innovation Ecosystems program collects and tracks these commitments in order to showcase successes, identify best practices and connect peer cities who can learn together. Here we share the story of one city’s work:

In a city where the unofficial slogan is “Keep Austin Weird”, it shouldn’t come as a surprise that the innovation district is a little different too. While many cities form innovation districts as one component of a greater strategy for economic renewal, Austin’s economy has surged over the last decade.

The city has a five-year economic growth rate of six percent, spends more on university R&D per capita than Boston and is widely recognized as the fastest growing city in America.

But the benefits of this growth, for the most part, have been accrued to high-skilled, imported talent in the city’s booming tech and data sectors, leaving many long-time Austin residents behind. There remain opportunities to create meaningful career pathways for middle-income, moderately skilled, long-term residents.

As part of a strategy to create those pathways, Austin is aggressively expanding its health and life sciences sectors. Nationally, these two sectors produce more middle-skills jobs than many tech-related industries. The University of Texas at Austin recently opened its Dell Medical School, the city’s first. It has partnered with Ascension Seton, Central Health, the Downtown Austin Alliance, the Austin Chamber of Commerce, the city of Austin, and Travis County to create a new health and life sciences innovation district — led by a non-profit organization, Capital City Innovation. Dell Med and Austin’s Innovation District create new opportunities for collaboration among health researchers, care providers, corporations and startups. These collaborations, and the 12,000+ jobs the city’s consortium hopes they create, could support the kind of inclusive economic growth the community desires.

In 2018, Austin joined 50 U.S. cities in making commitments to support innovation and entrepreneurship through the NLC City Innovation Ecosystems program. Austin committed to creating a public-private partnership to launch an innovation district anchored by the Dell Medical School.

In order to create synergy among the district’s many partners, a non-profit, Capital City Innovation, was created. Capital City Innovation’s inaugural executive director is Christopher Laing — a veteran of consortium innovation district programming who moved to Austin from Philadelphia at the end of 2017. We caught up with Chris to learn more about how Austin’s commitment is going:

While medical research, innovation and entrepreneurship go hand-in-hand in many cities, Austin has historically relied on its software engineering, data analytics and logistics sectors to drive its economy.  What makes this moment particularly ripe for a health care-centered innovation district?

When I left my previous job in Philadelphia and took a job with Capital City Innovation, I knew what was happening in Austin was special.

First, many of Austin’s strengths in data analytics, e-commerce and software development are being aggressively adopted in the health and life science sectors. Austin is uniquely positioned to take advantage of that evolution.

Second, we know there is a need to change the way health care is provided in the United States. UT-Austin didn’t have a medical school prior to 2015. In 2012, county residents passed a tax increase to create one: the Dell Medical School. I recognized the incredible opportunity Austin was pursuing to create an outcomes-focused, innovative health ecosystem essentially from scratch, with less entrenchment from legacy systems — and in a city that would enable new ideas to scale nationally.

Lastly, we had physical space to create something. Directly across the street from Dell Med, is the former Brackenridge Medical Center, a 14-acre complex that is being redeveloped as the core of Austin’s Innovation District. The flagship building is under construction now, and follow-on build-to-suit opportunities are in the process of being planned. The Innovation District will be a vibrant new neighborhood in Austin’s downtown — the place where the University, Austin’s Red River Cultural District, the Texas State Capitol, the Waterloo Greenway and commercial landscape blend and merge.

This work undoubtedly requires a lot of coordination among public, private and non-profit organizations. How has each played a role throughout the development phase of the district?

Capital City Innovation is a convening organization. Austin’s Innovation District is a consortium of many private and public entities, but CCI is the only organization that is exclusively focused on Austin’s Innovation District. It coordinates and synergizes the activities and capabilities of its stakeholders in the strategy, planning, and implementation of the district.

The Innovation District’s governance reflects the core innovation district property – The University of Texas at Austin (and its Dell Medical School), Ascension Seton (which operates the Dell Seton Medical Center), and Central Health (which owns the 14-acre site) — along with key stakeholders including the Downtown Austin Alliance, the Austin Chamber of Commerce (Opportunity Austin), the city of Austin and Travis County. CCI used the NLC call to action as a catalyst for linking the bylaws and governance structure to the Innovation District’s strategy and operating plan.

CCI’s working groups are designed to promote cooperation and synergy among a broad network of stakeholder. The Affinity Group includes representation from six health and life science business incubators and accelerators throughout Central Texas — our domestic startup pipeline. The Magnet Group creates a platform for collaboration among people who are interfacing with companies with an interest in Austin — including the Chamber’s business development team, the city’s economic development office and the university’s corporate relations groups. The Place Steering Committee brings together those of the district’s stakeholders and neighbors who are involved in physical planning and implementation. Program and communications working groups are in the planning stages.

It’s a challenge whenever you’re collaborating with a large number of organizations. The good news is everyone agrees on a 30-year vision for the district. When it comes to agreeing on a 12-month vision, it can be a little more challenging. This concept is new in Austin, though, so a few growing pains are to be expected.

Are there early signs that the collaboration is paying off?

A key project for the consortium in 2019 was a preliminary evaluation of the projected economic benefits associated with the strategic vision for the Innovation District. Since Austin is already on a steeply positive economic trajectory, is there a benefit to making additional investments in an Innovation District? The evaluation, which was conducted independently by the Downtown Austin Alliance and HR&A Associates, suggests that even compared to Austin’s current trajectory, the Innovation District will have a substantial positive impact on the community, creating greater economic value and more (and more diverse, especially middle-skills) job opportunities. We’re in the process of building out workforce pipelines into the professions we expect health and life science companies will need, while being careful not to reinvent the wheel.

We’ve also hit the ground running with programming. We focus on connecting innovators, attracting investment, and building workforce capacity. Our programs include a collaborative element — involving the medical school or other health-related stakeholders with companies, startups and community organizations.

For example, we work with the Dell Medical School in helping local entrepreneurs and investors to access expertise in clinical translation with an education series on health and life science product development. But we also like to partner laterally. We recently collaborated on a meetup called Hot Summer Nights. We collaborated with the Downtown Austin Foundation, the Art Alliance, and the Red River Cultural District to connect people in the healthcare community with local artists and musicians. We want to promote the blending of cultural and scientific innovations, and to position the Innovation District as a place for partnering.

Lastly, we’re happy to announce that we’ve pulled the trigger on new construction at the Brackenridge site. We’re in the demolition phase now and expect the first new building to be finished by 2022. Located right on Austin’s largest downtown public space, Waterloo Park, the Innovation District’s flagship building will be a microcosm of the district as a whole, with spaces for startups, university R&D, the community and investment firms. And I expect it to be quickly surrounded by a vibrant neighborhood of new ideas and experiences.

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This interview was lightly adapted by NLC to fit the constraints of this article’s format.

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About the Author: Phil Berkaw is a program manager on NLC’s Innovation Ecosystems team.